Dare I suggest it but it 'might' be a ram issue.

There's no need to continually Refresh LW. Doing so will use up LW's resources.

Incomplete files in red, see here: Library items in Red For normal files it means they're not being shared. You may notice if you open LW & immediately go to your Library window that all your shared files will be in red. After LW has loaded & accounted for them all they will turn to black one by one. Refreshing LW will repeat this process. The plus side to it is that new files will be counted as being shareable. The negative side is that it uses too much of LW's resources doing so. With only 356 RAM I'd be a little concerned. Are you sure that's 356 & not 256 MB RAM?

My LW can use up to 500 MB of ram if it's been running for a long time. I try to minimise this by closing all windows I'm not using at that time (eg: library, monitor, connections windows, etc. by going to View>Hide.) I also hide LW in the background when I'm not attending to it. I also delete old search results. LW also uses up Virtual Memory (VM) - as do all OSX apps - which is where memory is temporarily stored on the HDD. You can monitor how much ram & VM LW & other apps are using by opening the Activity Monitor found in the utilities folder. I think OS 10.2 has the monitor window. If not it'll be something similar.

Every mac osx folder has a .DS_Store file which is invisible. It keeps a record of such things as folder settings, etc.